Court-watchers at the FCC and among cable operators and other broadband providers are hoping the Supreme Court has gotten into the holiday spirit early. Today's Communications Daily [Lexis subscription required] predicts that the Court may decide within days whether to hear an important case, Brand X v. FCC, that may determine how well the FCC can protect cable modem service and, by implication, other broadband services from intrusive and costly regulation. If the Court accepts the case, it would open the possibility of overturning a 9th Circuit Court of Appeals ruling that rejected the FCC's decision to spare cable modem service the heavy regulation generally afforded traditional phone service.

The story of how the Communications Act can be interpreted in this area will not end whether or not the Court takes the case. If the 9th Circuit decision is allowed to stand, the FCC could still consider "forbearing" from regulating cable modem service though, as I have noted, such forbearance authority may be limited. If the Court takes the case and ultimately takes the FCC's position, the agency would still need to work through a host of additional issues. Most important among these are whether local franchise authorities will be allowed to regulate aspects of cable modem service and whether the FCC should reject formally calls to impose "net neutrality" requirements. (FCC Chairman Powell has emphasized publicly that there is no need to impose the latter, given that cable modem and DSL providers allow consumers to use the content, applications and devices of their choice freely.)

Nevertheless, the Brand X case is critical to the FCC's overall policy of enhancing incentives for companies to invest in building high-speed networks. The outcome of Brand X also may afford more or less urgency to efforts to reform the Communications Act to accommodate cable modem and other digital technologies.